Ted Bauman Explains Why Debt Is the Greatest Threat to Wealth

     Ted Bauman notes that most people in America are concerned about taxes. Currently, almost everyone is concerned about Trump/Ryan tax plan. Under the plan, the wealthy and corporations will enjoy significant tax cuts. Bauman is sad that the nation is obsessed with taxation yet it is not the primary problem facing Americans.

Taxes vs. Debts

Taxes attract the attention of most people since they lower disposable income. As a result of taxation, there is a reduction in consumption and investment. To Bauman, taxes mean nothing. To him, the most significant threat is debt. Credit markets are a serious threat especially to the middle-class.

Bauman disagrees with the narrative that life in America is expensive as a result of high demand. He argues that the availability of cheap credit is responsible for the high cost of housing and education. But what is his premise? If people were required to pay for these goods in cash, their prices would fall drastically.

Bauman’s finds it challenging to explain why the American economy is heavily debt-based. He sees it as a cycle; debt has caused so much lending and lending has come as a result of so much debt. The decision by the rich to invest in consumer lending markets has led to tremendous increase in income and wealth inequality in America today.

What’s the Impact of Loans?

Despite many people viewing loans as good for financial growth, Bauman has a different viewpoint. When consumers have access to loans, they can purchase goods and products with a relatively fixed supply at higher prices. This leads to an increase in the flow of money in the economy. The excess cash then has to be invested in the credit market. They cycle continues.

What’s Next?

Now that we have known the problem, it is advisable to find a way to tackle debts. A reduction in tax will lead a rise in deficits. The solution lies in interrupting this lending cycle since this will have the same impact on the prices of housing and education as tax reduction without affecting deficit.

Who is Ted Bauman?

Ted Bauman works at Banyan Hill Publishing as the editor of three newsletters namely The Bauman Letter, Plan B Club and Alpha Stock Alert. He specializes in providing critical information about property protection, privacy, human migration, and investment openings.

In Alpha Stock Alert, Bauman has beaten the S&P 500 index in the last ten years. His master of the market became even more evident when he made profits even during the financial crisis of 2008. Over the years, he has helped his readers take control of their economic destiny.

 

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